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Essar Steel India Limited Page 1

ESSAR STEEL INDIA LIMITED

POLICY FOR APPOINTMENT, REMUNERATION AND

EVALUATION OF DIRECTORS AND EMPLOYEES

ONLY FOR INTERNAL USE

This Policy is confidential and proprietary to Essar Steel India Ltd and no part of this Policy should be

reproduced, published, transmitted or distributed in any form or by any means, electronic, mechanical,

photocopying, recording or otherwise, or stored in any information storage or retrieval system of any

nature nor should the materials be disclosed to third parties without the prior express written authorization

of Essar Steel India Ltd.


A. Document Control

Document Name Policy for Appointment, Remuneration

and Evaluation of Directors and

employees

Version No. 1

Date of publication May 21, 2015

Planned review date

Process Owner: Nomination and Remuneration

Committee

Approved By: Board of Directors

B. Revision History

Version Date of

issue

Reason for change

1 May 21,

2015

Policy adopted

2

3

4

5.

6.

7.

8


Contents

1. General

2. Selection, identification and appointment of

Directors

3. Criteria for appointment of Senior Management

executives

4. Remuneration

5. Performance evaluation and re-appointment

6. Mechanism for evaluation of Board, Chairman and

Directors


1. General

1.1 The Companies Act, 2013 requires the Company to formulate the criteria for

determining qualifications, positive attributes and independence of directors. The

Company is also required to adopt a policy, relating to the remuneration for the

directors, key managerial personnel and other employees.

1.2 To meet these objectives, the policy on appointment, remuneration and evaluation

of directors has been adopted by the Board of Directors on May 21, 2015.


2. Selection, identification and appointment of

Directors

2.1 The Nomination and Remuneration Committee is responsible for evaluating the

qualifications of each director candidate and of those directors who are to be

nominated for election by shareholders at each Annual General Meeting of

shareholders, and for recommending duly qualified director nominees to the full

Board for election. The qualification criteria set forth herein are designed to describe

the qualities and characteristics desired for the Board as a whole and for Board

members individually.

2.2 Director Selection Procedures

2.2.1 Corporate Human Resources (CHR) department shall identify and shortlist

prospective candidates for election to the Board based on directors’ qualification

criteria.

2.2.2 For each shortlisted director candidate considered for election to the Board, the

Nomination and Remuneration Committee shall evaluate each director candidate

and recommend to the Board any duly qualified director candidates.

2.2.3 To aid in the short listing and screening process the Nomination and Remuneration

Committee may take the support of professional agencies, conduct interviews or

have a personality check undertaken or take any other steps to ensure that the

right candidates are identified.

2.2.4 A determination of a director’s qualifications to serve on the Board shall be made

by the Board, upon the recommendation of the Committee, prior to nominating

said director for election at the Company’s next Annual General Meeting.

2.2.5 Appointment of all Directors, other than directors appointed pursuant to

nomination by Financial Institutions under section 161(3) of the Act will be approved

by shareholders at a general meeting or through postal ballot.

2.2.6 The company shall issue a formal letter of appointment to independent directors in

the manner as provided in Paragraph IV(4) of Schedule VI the Act.

2.3 Director qualification criteria

2.3.1 The director candidates should have completed the age of 21 years. The maximum

age of executive directors shall not be more than 70 years at the time of

appointment / re-appointment. However a candidate who has attained the age

of 70 years may be appointed if approved by shareholders by passing of special

resolution.

2.3.2 The Board has not established specific education, years of business experience or

specific types of skills for Board members, but, in general, expects qualified directors

to have ample experience and a proven record of professional success, leadership

and the highest level of personal and professional ethics, integrity and values.

2.3.3 The candidate to be appointed as Director shall have a Director Identification

Number allotted under section 154 of the Companies Act, 2013 (Act).


2.3.4 A person shall not be eligible for appointment as director of the Company if:

2.3.4.1 he is disqualified for being appointed under section 164 of the Act.

2.3.4.2 the number of directorships post appointment as Director in the Company

exceeds the total number of directorships permitted under section 165 of the

Act.

2.3.5 In addition any person to be appointed as a Managing Director or whole time

director in the Company (hereinafter referred to as ‘Executive Directors’) shall have

to meet the following requirements for being eligible for appointment shall have to

meet the requirements set out in Part I of Schedule V of the Act.

2.3.6 Further, while selecting Independent Directors:

2.3.6.1 the Company may select the candidate from data bank(s) containing names,

address, qualification of persons who are eligible and willing to act as

Independent Directors maintained by any body, institute or association as may

be notified by the Central Government having expertise in creation and

maintenance of such data bank.

2.3.6.2 the prospective candidates for appointment as Independent Directors shall

have to meet the criteria of Independence laid down in sub-section (6) of

section 149 of the Act.

2.3.7 In the process of short listing Independent Directors, the Board shall ensure that

there is appropriate balance of skills, experience and knowledge in the Board so

as to enable the Board to discharge its functions and duties effectively.

2.4 Tenure in office

2.4.1 The appointment of all directors by the Board except for directors appointed under

section 161(3) of the Act shall be upto the date of the next Annual General Meeting

and shall be subject to approval of shareholders at the Annual General Meeting

unless approved by the shareholders earlier.

2.4.2 The Executive Directors shall be appointed for a term of upto 5 years.

2.4.3 Subject to the provisions of the Act and Article 98(2), 99(2), 100(2) and other

applicable Articles of the Articles of Association of the Company all Executive

Directors and all Non-Executive Directors other than the Independent Directors,

Debenture Directors (as defined in the Articles of Association of the Company) and

Nominee Directors, shall be liable to retire by rotation.

2.4.4 Independent Directors shall hold office for a term upto 5 consecutive years on the

Board of the company but shall be eligible for re-appointment on passing of a

special resolution by the company.

2.4.5 Independent Directors shall not hold office for more than 2 consecutive terms. Each

such term may be of 5 years or less.

2.4.6 After expiry of the 2 terms, the Independent Director would be eligible for

appointment only after expiry of 3 years from ceasing to being an ID.


2.4.7 While appointing the Independent Directors, the Board shall decide the term in

office of the Independent Directors which may vary depending on the age of the

candidate, the professional background, the outcome of evaluation of the

individual Director and the Committees of which he is a member.


3. Criteria for appointment of Senior Management

executives

3.1 The Nomination and Remuneration Committee is responsible for the appointment

of senior management executives in accordance with the laid down criteria.

3.2 The criteria laid down for the appointment of senior management executives just

below the Executive Directors including the Key Managerial Personnel is set out

below.

3.3 The Senior Management Executives are sourced from Internal and external sources.

These resumes are shortlisted by the hiring manager and the shortlisted candidates

are scheduled for Interviews to be managed by Human Resources department.

3.4 An Interview Committee is formed which comprises of the following members:

3.4.1 Executive Vice Chairman / Managing Director

3.4.2 Steel advisor from Essar Corporate Centre

3.4.3 Head- HR

3.4.4 Team of subject matter expertise

3.5 The Interview Committee is responsible for leading the talent acquisition process and

to ensure timely fulfilment of this vacancy. The HR Team will provide requisite support

in the timely fulfilment of each step of the talent acquisition process.

3.6 The role and responsibilities of the Interview Committee shall be as under:

3.6.1 Review and approve Job Description for the vacant position.

3.6.2 Determine internal options

3.6.3 Suggest/approve the list of companies to be hired from & recommend possible

candidates from known contacts/sources.

3.6.4 Brief the Recruitment Partner / Executive Search Firm, where applicable, on the

expectations from them.

3.6.5 Review and approve the long list shared by the talent acquisition team and

short list the candidates.

3.6.6 Interview and evaluate the shortlisted candidates.

3.6.7 Engage with the talent acquisition team for offer and compensation finalization

3.7 The candidate shortlisted by the Interview committee will be recommended for

further evaluation and appointment by the Nomination & Remuneration Committee

after completion of the reference check process.

3.8 The primary responsibility for hiring of these roles will lie with the Interview Committee.

The final selection shall be made based on the decision taken by the Nomination &

Remuneration Committee.

4. Remuneration


4.1 All remuneration / fees / compensation, payable to directors shall be fixed by the

Board of Directors and payment of such remuneration / fees / compensation shall

require approval of shareholders in general meeting except for sitting fee payable

to Non-Executive Directors for attending Board / Committee Meetings.

4.2 The Board shall decide on the remuneration / fees / compensation, payable to

directors based on the recommendations of the Nomination and Remuneration

Committee.

4.3 The total managerial remuneration payable, to its directors, including managing

director and whole-time director, (and manager) in respect of any financial year

shall not exceed eleven percent of the net profits of the company for that financial

year computed in the manner laid down in section 198 of the Act. Provided that the

company in general meeting may, with the approval of the Central Government,

authorise the payment of remuneration exceeding eleven percent of the net profits

of the company, subject to the provisions of Schedule V of the Act:

4.4 The Nomination and Remuneration Committee shall ensure the following while

recommending the remuneration / fee / compensation payable to Directors:

4.4.1 Executive Directors

4.4.1.1 The remuneration payable to any one managing director; or whole-time director

or manager shall not exceed five percent of the net profits of the company and if

there is more than one such director remuneration shall not exceed ten percent of

the net profits to all such directors and manager taken together. Else the

remuneration will be subject to approval of central government as may be

required.

4.4.1.2 In case of inadequacy of profits mentioned in 4.3 and 4.4.1.1 above, the

Committee while approving the remuneration for executive directors

4.4.1.2.1 take into account, financial position of the company, trend in the industry,

appointee’s qualification, experience, past performance, past remuneration,

etc.

4.4.1.2.2 be in a position to bring about objectivity in determining the remuneration

package while striking a balance between the interest of the company and

the shareholders.

4.4.2 While considering payment of remuneration / increase in remuneration payable to

executive directors, key managerial personnel and other executives, the

Nomination and Remuneration Committee may among other factors consider the

following:

4.4.2.1 the level and composition of remuneration is reasonable and sufficient to attract,

retain and motivate directors of the quality required to run the company

successfully

4.4.2.2 relationship of remuneration to performance is clear and meets appropriate

performance benchmarks; and

4.4.2.2.1 remuneration to directors, key managerial personnel and senior management

involves a balance between fixed and incentive pay reflecting short and long-


term performance objectives appropriate to the working of the company and

its goals.

4.4.2.2.2 the factors mentioned in The Companies (Appointment and Remuneration of

Managerial Personnel) Rules 2014, may be considered, which are required to

be disclosed in the Directors Report.

4.4.3 Non-Executive Directors including Independent Directors

4.4.3.1 The remuneration payable to Non-Executive Directors shall not exceed 1% of the

net profits of the Company.

4.4.3.2 A Non-Executive director may be paid remuneration by way of fee for attending

meetings of the Board or Committee thereof or for any other purpose whatsoever.

The amount of such fee shall not exceed ` 1,00,000 for attending each meeting of

the Board or Committee thereof or such higher amount as may be prescribed by

the Central Government.

4.4.3.3 An independent director shall not be entitled to any stock option


5. Performance evaluation and re-appointment

5.1 The Board will annually evaluate its performance through a self-evaluation process.

The evaluation identifies enhancements to director skill sets and ensures that board

members are performing to expectations.

5.2 Evaluation review process

5.2.1 The Nomination & Remuneration Committee will annually oversee a review of the

Board’s performance, which shall include a self-evaluation by the Board, and will

discuss the results of this review with the full Board following the end of each fiscal

year.

5.2.2 Evaluation of the Board and Committees thereof – formal annual evaluation has to

be made by the Board of its own performance and that of its Committees.

5.2.3 Evaluation of Chairman - A separate meeting of Independent Directors will review

the performance of the Chairperson of the company, taking into account the

views of executive directors and non-executive directors. They will forward their

recommendations to the Nomination and Remuneration Committee.

5.2.4 Other Non-Independent Directors - The Independent Directors will also review the

performance of non-independent directors and the Board as a whole and submit

their recommendations to the Nomination and Remuneration Committee.

5.2.5 Executive Directors - The Nomination and Remuneration Committee conducts an

annual review of the performance of the Managing Director & CEO and other

whole-time directors against the Company’s goals and objectives based on

Balanced Scorecard methodology.

5.2.6 Independent Directors - The performance evaluation of independent directors shall

be done by the entire Board of Directors (excluding the director being evaluated).

5.2.7 A statement indicating the manner of formal annual evaluation of the Board, its

Committees and individual directors will be made will be included in the Report of

the Board of Directors each year.

5.3 Criteria for evaluation

5.3.1 Evaluation of Board as a whole:

The Independent Directors and the Nomination and Remuneration Committee

while undertaking board evaluation will decide on the criteria of evaluation of the

Board and its Committees which among others may include:

5.3.1.1 the extent to which the Board and its Committees are successful in fulfilling their

key roles and responsibilities.

5.3.1.2 the extent to which individual directors contribute to the achievement of these

objectives.


5.3.1.3 the extent to which the Board and its Committees adhere to best practices in

structure and procedure.

5.3.1.4 the Committee will consider the balance of skills, experience, independence and

knowledge requirements at Company’s Board and the diversity representation

of the Board, including gender, how the Board works together as a unit, and other

factors relevant to its effectiveness.

5.4 Non-Executive Directors

5.5 The criteria for evaluation shall be determined by the Nomination and Remuneration

Committee and the actual evaluation process shall remain confidential and shall

be a constructive mechanism to improve the effectiveness of the Board /

Committees. An indicative list of factors that may be evaluated as part of this

exercise is :

5.5.1 Participation in meetings and contribution by director

5.5.2 Commitment including guidance provided to senior management executives

outside of Board / Committee meetings

5.5.3 Effective deployment of expertise and knowledge

5.5.4 Effective management of relationship with stakeholders

5.5.5 Integrity and maintenance of confidentiality

5.5.6 Independence of behavior and judgement

5.5.7 Impact and influence.

5.6 Executive Directors

5.6.1 Balance Score Card is derived from Annual Business Plan and goals are aligned

and cascaded across the organization, and linking to every Executive Director’s

performance. Assessment parameters will be defined for each of the goals and

performance will be measured against the goals at the end of each financial year.

The compensation will be finalized by the Nomination and Remuneration

Committee based on evaluation of the individual director and the performance of

the Company.

5.7 Structure of evaluation process

5.7.1 The structure of the evaluation process will be finalized by the Nomination and

Remuneration Committee either on its own in consultation with Corporate Human

Resources Department or by engaging the services of external consultants.

5.7.2 Each board evaluation may have slight differences in focus, priority and outcomes

but will broadly follow a similar approach.

5.7.3 Board evaluation to be finalized by the Nomination and Remuneration Committee

may cover the following areas :

5.7.3.1 Briefing of the Board


5.7.3.2 Gathering of evidence using a questionnaire

5.7.3.3 Drafting of Board evaluation report

5.7.3.4 Discussion of the Board evolution report by the entire Board

5.7.3.5 Meetings between the Chairman and individual directors to discuss individual

director evaluation

5.7.3.6 Determination of Board development strategy

5.8 Re-appointment of Directors

5.9 The re-appointment of directors will not be automatic.

5.10 Before the expiry of term in office on account of retirement by rotation of Non-

Executive Non Independent Directors liable to retire by rotation or the completion of

term in office of the Executive Directors or Independent Directors, the Nomination

and Remuneration Committee will make recommendations to the Board.

5.11 In determining whether the directors should be submitted to re-appointment, the

Nomination and Remuneration Committee should:

5.11.1 Consider extending or continue the term of appointment of the Directors on the

basis of performance evaluation;

5.11.2 Assess the current Board’s skills and qualities;

5.11.3 The needs of the Company’s business currently and going forward;

5.11.4 Measure the retiring directors’ skills against the selection criteria set by the

Nomination and Remuneration Committee.

5.12 The directors eligible to retire by rotation shall be determined based on the provisions

of section 152 of the Act,

5.13 Shareholders’ approval for reappointment of Executive Directors shall not be taken

more than 1 year before expiry of their present term.

5.14 Disclosure

Summary of results of performance evaluation shall be disclosed in the Annual Report

and re-appointment of Independent directors shall be basis the outcome of such

evaluation.


6. Mechanism for evaluation of Board, Chairman

and Directors

6.1 The Nomination & Remuneration Committee has formulated the following

mechanism for evaluation of the entire Board & Committees.

6.2 The Head of Essar Group Corporate Human Resources department (CHR) shall lead

the performance evaluation process. CHR shall circulate questionnaire to the

Directors, seek their responses, have individual discussions with the directors and

compile the feedback of the directors.

6.2.1 The evaluation of the Board has a whole shall be done by all the directors.

6.2.2 The evaluation of the Independent Directors shall be done by the entire Board

excluding the director being evaluated

6.2.3 The evaluation of the Non-Independent Directors shall be done by only the

Independent Directors

6.2.4 The evaluation of performance of the Chairman shall be done by the Independent

Directors.

6.3 The performance evaluation shall be undertaken based on the feedback provided

by Board members as per the following questionnaires.

6.3.1 Annexure 1 – Evaluation of the performance of entire Board

6.3.2 Annexure 2 - Evaluation of the performance of Audit Committee by the Board

6.3.3 Annexure 3 - Evaluation of the performance of Nomination & Remuneration

Committee

6.3.4 Annexure 4 - Evaluation of the performance of Stakeholders’ Relationship Committee

6.3.5 Annexure 5 - Evaluation of the performance of CSR & Sustainability Committee

6.3.6 Annexure 6 – Evaluation of the performance of Finance Committee

6.3.7 Annexure 7 - Evaluation of Individual directors

6.3.8 Annexure 8 – Evaluation of performance of the Chairman

6.4 The questionnaires can be answered by rating the statements sot out therein on a

scale of 1 to 3 as per the following parameters:

6.4.1 Score of 1 – Needs improvement

6.4.2 Score of 2 – Performance meets expectations

6.4.3 Score of 3 – Performance exceeds expectations and sets new standards

6.5 The Company Secretary shall forward details of composition of the Board and

Committees and a report of attendance of directors at Board and Committee

meetings to the CHR. The CHR will have individual discussions with the Directors and

based on the feedback of the directors, shall prepare a consolidated report on

Board/Committee evaluation and evaluation of individual directors. The formats of

the reports shall be as under:

6.5.1 Annexure 9 – Report of Board evaluation

6.5.2 Annexure 10 – Report of evaluation of individual directors

6.6 The CHR shall submit their report as under:

6.6.1 Evaluation report of the performance of the Board shall be submitted to the Chairman

of the Nomination & Remuneration Committee, who shall present it to the Board.


6.6.2 Evaluation report of Individual Directors (excluding the Chairman of the Nomination

& Remuneration Committee) shall be submitted to the Chairman of the Nomination

& Remuneration Committee, who will have it submitted to the Committee. The

evaluation report of the Chairman of the Committee will be forwarded to the

Chairman of the Board who will have it submitted to the Board or Committee.

6.6.3 Evaluation report of the Chairman shall be submitted to the Chairman of the

Nomination & Remuneration Committee, who will discuss the same with the Chairman

and thereafter submit it to the Board.


Annexure 1

Evaluation of the performance of entire Board

EVALUATION FORM FOR BOARD / COMMITTEE THEREOF

How do you rate the following statements regarding the Board?

If you give a rating from1 to 3, then please use the space at the foot

of the page for comments.

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Circle the number of the response that represents your best

judgment.

1. BOARD COMPOSITION / STRUCTURE

1.1 In terms of skill and expertise, how well represented do you think

the Board is in terms of each of the following:

o Steel Industry Expertise 1 2 3

o Marketing Expertise 1 2 3

o Financial Expertise 1 2 3

o International Expertise 1 2 3

o Corporate Governance 1 2 3

o Acquisition Expertise 1 2 3

o Overall Business Leadership 1 2 3

o Safety and Sustainability 1 2 3

1.2 Are there any other skills or areas of expertise you would like to

see represented?


1.2 The Company has an appropriate board size and structure. 1 2 3

1.3 The composition of the board complies with the provisions of the

Companies Act, 2013 and the Corporate Governance

Guidelines.

1 2 3

1.4 How would you rate relations between executive and non-

executive directors?

1 2 3

2. BOARD PROCESS

2.1 How would you rate each of the following in relation to the way

in which we conduct and manage our Board meetings?

o Effectiveness of decision-making 1 2 3

o Important issues are properly discussed 1 2 3

o Timely circulation of Board papers 1 2 3

o Quality of the Board papers and presentations by

management

1 2 3

o Open and honest communication 1 2 3

o Participation by non-executive directors 1 2 3

o Timely implementation of Board decisions 1 2 3

o Effective monitoring of progress against decisions made 1 2 3

o Overall quality of discussion 1 2 3

2.2 Are there issues not covered at Board meetings which you

believe should be covered?

2.3 Is the frequency of Board meetings appropriate? 1 2 3

2.4 Is the length of Board meetings appropriate? 1 2 3

2.5 Do the matters currently reserved for the Board provide an

appropriate framework for the Board's responsibilities?

1 2 3

(Kindly note there are no internal policies for reserved matters for

Board. The reserved matters arise out of Companies Act

provisions and rules made thereunder)


3. INFORMATION

3.1 How would you rate the level of access to management

enjoyed by Board members?

1 2 3

3.2 Do you feel that management provides you with the right level

of information to fulfil your duties?

1 2 3

3.3 How does the Board rate the level of financial information

provided (including performance reports, budgets, forecasts

and financial statements)?

1 2 3

3.4 Do you consider that in 2014-15, the Company has kept you

sufficiently up to date with developments that affect your

responsibilities as a director?

1 2 3

3.5 Have you attended any internal or external training or

development courses?

1 2 3

3.6 How do you rate the usefulness of the training sessions? 1 2 3

3.7 How do you rate the trigger levels for Board involvement in major

business policies and decisions?

1 2 3

3.8 How well informed are you about the major competitors? 1 2 3

3.9 Are there any areas in which you would like further information and/or training?

4. STRATEGY / KPIs

4.1 How effective is the Board at setting a clear strategic course and

testing its performance against set objectives?

1 2 3

4.2 How well does the Company monitor performance against

agreed objectives?

1 2 3

4.3 The Board evaluates the strategic plan periodically to assess the

institution’s performance, considers new opportunities and

responds to unanticipated external developments.

1 2 3


4.4 The Board focuses its attention on long-term policy issues rather

than short-term administrative matters.

1 2 3

4.5 How well does the Board monitor performance against its Key

Performance Indicators?

1 2 3

4.6 How effective is the Board at discussing issues related to the

Company's strategy and its long-term competitiveness?

1 2 3

4.7 The Board discusses thoroughly the annual budget of the

organisation and its implications before approving it.

1 2 3

5. RISK MANAGEMENT

5.1 How effective is the Board at regularly reviewing business and

financial risk factors?

1 2 3

5.2 How effective has the Board been at ensuring that the

Company's risk management systems and procedures are

reviewed and updated regularly?

Note: The Board has delegated the responsibility of review of risk

management systems to the ‘Audit Committee’.

1 2 3

5.3 What do you think are the 3 most significant risks for the business?

6. BOARD COMMITTEES

6.1 How would you rate the composition of the Board Committees? 1 2 3

6.2 How would you describe the performance of the Board

Committees in discharging their duties for Committees?

1 2 3

7. SUMMARY OPINIONS

7.1 Please indicate the extent to which you agree or disagree with

each of the following statements in relation to the role of the

Board.

o Board meetings focus on the right issues. 1 2 3

o Board ensures that the Company addresses areas in need

of improvement

1 2 3


o The Board has performed its duties effectively 1 2 3

7.2 Are there any other comments you wish to make about the way the Board operates?


Annexure 2

Evaluation of the performance of Audit Committee by the Board

AUDIT COMMITTEE

How do you rate the following statements regarding the Committee?

If you give a rating from 1 - 3, then please use the space at the foot of

the page for comments.

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Circle the number of the response that represents your best judgment.

1. AUDIT COMMITTEE MEETINGS

1.1 Please indicate how you would rate each of the following in the

way we conduct and manage Audit Committee meetings:

o Chairing of the meeting. 1 2 3

o Effectiveness of decision-making. 1 2 3

o Important issues are properly discussed. 1 2 3

o Timely circulation of Committee papers 1 2 3


o Timely implementation of Committee decisions 1 2 3


1.2 Are there issues/topics not covered at Audit Committee meetings which you believe

should be covered?

1.3 Are the Committee's Terms of Reference appropriate and clearly

defined?

1 2 3


1.4 How do you rate the quality of Audit Committee papers (eg is the

level of detail and quality of financial reporting material about

right?)

1 2 3

1.5 Is the frequency of Committee meetings appropriate? 1 2 3

1.6 Is the length of Committee meetings appropriate? 1 2 3

2. EXTERNAL AND INTERNAL AUDITORS

2.1 How would you rate the quality of the external audit team? 1 2 3

2.2 How would you rate the external auditors independence? 1 2 3

2.3 Over the last year, how would you rate the external auditor's

effectiveness and efficiency?

1 2 3

2.4 How would you rate the relationship with the external auditor

(private meetings, ad hoc access etc.)?

1 2 3

2.5 Do you believe the fees charged by the external auditors are

reasonable?

1 2 3

2.6 Does Internal Audit demonstrate an understanding of the business

and the risks it faces?

1 2 3

2.7 Does Internal Audit show independence? 1 2 3

2.8 Are Internal Audit's work plans appropriate in scope and timing? 1 2 3

2.9 Are Internal Audit's methodologies and reports appropriately

robust?

1 2 3

2.10 How would you rate the overall performance of the Internal

Audit team?

1 2 3

3. OVERALL PERFORMANCE

3.1 How would you rate the overall performance of the Audit

Committee?

1 2 3

3.1 Are there any areas on which you would like further training and/or information to

assist you in your role on the Committee?


Annexure 3

Evaluation of the performance of Nomination & Remuneration Committee by the Board

NOMINATION & REMUNERATION COMMITTEE




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1. NOMINATION & REMUNERATION COMMITTEE MEETINGS


way we conduct and manage Committee meetings:








1.2 Are there any issues/topics not covered at Remuneration & Nomination Committee

meetings which you believe should be covered?


defined?

1 2 3

1.4 How do you rate the quality of Remuneration & Nomination

Committee papers (eg is their length and level of detail right?)

1 2 3




1.7 Is management responsive to requests for clarification or

information

1 2 3


2.1 How would you rate the overall performance of the Nomination

& Remuneration & Committee?

1 2 3

2.2 Are there areas on which you would like further training and/or information to assist you

in your role on the Committee?

NOMINATION & REMUNERATION COMMITTEE

How do you rate the following statements regarding the

Committee?

If you give a rating from 1 - 3, then please use the space at the

foot of the page for comments.

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judgment.


Annexure 4

Evaluation of the performance of the Stakeholders’ Relationship Committee by the Board

STAKEHOLDERS’ RELATIONSHIP COMMITTEE




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1. STAKEHOLDERS’ RELATIONSHIP COMMITTEE MEETINGS










1.2 Are there any issues/topics not covered at Stakeholders’ Relationship Committee

meetings which you believe should be covered?


defined?

1 2 3

1.4 How do you rate the quality of Stakeholders’ Relationship

Committee papers (eg. is their length and level of detail right?)

1 2 3





information

1 2 3


2.1 How would you rate the overall performance of the Stakeholders’

Relationship Committee?

1 2 3




Annexure 5

Evaluation of the performance of CSR & Sustainability Committee by the Board

CSR & SUSTAINABILITY COMMITTEE




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1. CSR & SUSTAINABILITY COMMITTEE MEETINGS










1.2 Are there any issues/topics not covered at CSR & Sustainability Committee meetings

which you believe should be covered?


defined?

1 2 3

1.4 How do you rate the quality of CSR & Sustainability Committee

papers (eg. is their length and level of detail right?)

1 2 3





information

1 2 3


2.1 How would you rate the overall performance of the CSR &

Sustainability Committee?

1 2 3




Annexure 6

Evaluation of the performance of Finance Committee by the Board

FINANCE COMMITTEE




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1. FINANCE COMMITTEE MEETINGS










1.2 Are there any issues/topics not covered at Finance Committee meetings which you

believe should be covered?


defined?

1 2 3

1.4 How do you rate the quality of Finance Committee papers (eg. is

their length and level of detail right?)

1 2 3





information

1 2 3


2.1 How would you rate the overall performance of the Finance

Committee?

1 2 3




Annexure 7

Evaluation of performance of the Chairman

CHAIRMAN EVALUATION

How do you rate the following statements regarding the Chairman?

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judgement.

1. MANAGING RELATIONSHIPS: The Chairperson

1.1 actively manages shareholders, board, management and

employee relationships and interests.

1 2 3

1.2 meets with potential providers of equity and debt capital. 1 2 3

1.3 manages shareholders’ meetings effectively and promotes a

sense of participation in all shareholders and promoters

shareholder confidence in the Board.

1 2 3

2. LEADERSHIP: The Chairperson

2.1 is an effective leader. 1 2 3

2.2 promotes effective participation of all board members in the

decision making process.

1 2 3

2.3 takes action to correct deficiencies noted. 1 2 3

2.4 promotes the image of the Company. 1 2 3

2.5 is involved in determining board information packages. 1 2 3

2.6 promotes continuing training and development of directors. 1 2 3

3. SUGGESIONS, IF ANY


Annexure 8

Evaluation of Individual directors

DIRECTORS EVALUATION

How do you rate the following statements regarding the Directors?

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Circle the number of the response that represents your best judgement.

1. EVALUATION OF DIRECTORS

1.1 Overall participation in meetings 1 2 3

1.2 How good is each Director's understanding of the workings and

issues affecting the Company's Business?

1 2 3

1.3 The Directors -

a) has ability to remain focused at a governance level in board

meetings.

1 2 3

b) contributes to the strategic planning process. 1 2 3

c) understands governance, regulatory, legal, financial,

fiduciary and ethical requirements of the board.

1 2 3

d) adheres to high standards of personal integrity and gives high

priority to ethical standards.

1 2 3

e) practices confidentiality. 1 2 3

f) adds good value to the institution. 1 2 3

g) has ability to see implications of broad organizational issues. 1 2 3

h) keeps abreast with latest developments in the sector. 1 2 3

i) has adequate knowledge of the institution’s key activities,

financial condition and key developments.

1 2 3

j) communicates convincingly yet diplomatically. 1 2 3

k) contributes to board deliberations or committee work. 1 2 3

l) comes prepared for meetings. 1 2


2. INDUSTRY KNOWLEDGE AND STRATEGIC SENSE

2.1 How good is Director's understanding of the industry, the business

and the competitors?

1 2 3

2.2 How do you rate Director's contribution to the Board's strategic

thinking?

1 2 3

3 ABILITY TO WORK WITH FELLOW DIRECTORS

Does Director work constructively with his fellow Directors? 1 2 3

4 INDEPENDENCE OF DIRECTOR

How do you rate non-executive director's ability to take an

independent view regarding Company matters?

1 2 3

5 OVERALL CONTRIBUTION

5.1 How do you rate Director's overall contribution and value to the

Board?

1 2 3

5.2 Are there any other comments you would like to make regarding any individual's

contribution to the Board?


Annexure 9

Evaluation report on Board performance

[to be submitted by CHR to the Chairman]

Board evaluation

Ag

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co

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1. BOARD COMPOSITION

1.1 In terms of skill and expertise, how well represented do you think the Board is in terms

of each of the following:

o Steel Industry Expertise

o Marketing Expertise

o Financial Expertise

o International Expertise

o Corporate Governance

o Acquisition Expertise

o Overall Business Leadership

o Safety and Sustainability

1.2 Are there any other skills or areas of expertise you would like to see represented?

1.3 The composition of the board complies with the provisions of the Companies Act,

2013 and the Corporate Governance Guidelines.

1.4 How would you rate relations between executive and nonexecutive directors?

2. BOARD PROCESS

2.1 How would you rate each of the following in relation to the way in which we conduct

and manage our Board meetings?

o Effectiveness of decision-making

o Important issues are properly discussed

o Timely circulation of Board papers

o Quality of the Board papers and presentations by management


o Participation by non-executive directors

o Timely implementation of Board decisions

o Effective monitoring of progress against decisions made

o Overall quality of discussion

2.2 Are there issues not covered at Board meetings which you believe should be

covered?

2.3 Is the frequency of Board meetings appropriate?

2.4 Is the length of Board meetings appropriate?

2.5 Do the matters currently reserved for the Board provide an appropriate framework

for the Board's responsibilities?

(Kindly note there are no internal policies for reserved matters for Board. The reserved

matters arise out of Companies Act provisions and rules made thereunder)

3. INFORMATION

3.1 How would you rate the level of access to management enjoyed by Board

members?

3.2 Do you feel that management provides you with the right level of information to fulfil

your duties?

3.3 How does the Board rate the level of financial information provided (including

performance reports, budgets, forecasts and financial statements)?

3.4 Do you consider that in 2014-15, the Company has kept you sufficiently up to date

with developments that affect your responsibilities as a director?

3.5 Have you attended any internal or external training or development courses?

3.6 How do you rate the usefulness of the training sessions?

3.7 How do you rate the trigger levels for Board involvement in major business policies

and decisions?

3.8 How well informed are you about the major competitors?

3.9 Are there any areas in which you would like further information and/or training?

4. STRATEGY / KPIs / RISK MANAGEMENT

4.1 How effective is the Board at setting a clear strategic course and testing its

performance against set objectives?


4.2 How well does the Company monitor performance against agreed objectives?

4.3 The Board evaluates the strategic plan periodically to assess the institution’s

performance, considers new opportunities and responds to unanticipated external

developments.

4.4 The Board focuses its attention on long-term policy issues rather than short-term

administrative matters.

4.5 How well does the Board monitor performance against its Key Performance

Indicators?

4.6 How effective is the Board at discussing issues related to the Company's strategy

and its long-term competitiveness?

4.7 The Board discusses thoroughly the annual budget of the organization and its

implications before approving it.

5. RISK MANAGEMENT

5.1 How effective is the Board at regularly reviewing business and financial risk factors?

5.2 How effective has the Board been at ensuring that the Company's risk management

systems and procedures are reviewed and updated regularly?

Note: The Board has delegated the responsibility of review of risk management

systems to the ‘Audit Committee’.

5.3

What do you think are the 3 most significant risks for the business?

6. BOARD COMMITTEES

6.1 How would you rate the composition of the Board Committees?

6.2 How would you describe the performance of the Board Committees in discharging

their duties for Committees?

6.3 How well does the Remuneration and Nomination Committee review the

remuneration packages and performance against targets of the senior

management team?

6.4 How well does Remuneration and Nomination Committee review the capabilities,

performance and ethics of the senior management team?

6.5 How effective is the Remuneration and Nomination Committee at reviewing

succession plans for members of the senior management team and maintaining a

contingency succession plan?

7. SUMMARY OPINIONS


7.1 Please indicate the extent to which you agree or disagree with each of the following

statements in relation to the role of the Board.

o Board meetings focus on the right issues.

o Board ensures that the Company addresses areas in need of Improvement

o The Board has performed its duties effectively

7.2 Are there any other comments you wish to make about the way the Board

operates?


Annexure 10

Report of evaluation of individual directors

Directors All values in percentage to the maximum

possible score / attendance

Overall

performance

in meetings

Contributions

to the Board

Attendance

at meetings


Report to be given by Company Secretary to CHR for evaluation of individual directors

[Attendance at Board / Committee Meetings during meetings held in FY ______ to be

forwarded by the Company Secretary to CHR]

Sl.

No.

EVALUATION OF DIRECTORS (attendance at meetings) Eligibility Attendance Percentage

attendance

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